2014
is off to a positive start. The WSTS/SIA reports strong IC unit shipment growth
through April; and both the silicon and leadframe unit data collected here
through SEMI show solid year-over-year growth comparisons as well.

In
addition, a number of leading packaging houses have boosted their 2014 capex
plans during the first quarter for investment in wafer bumping, wafer-level
packaging, and other advanced applications. Of course, these plans are subject
to change “depending on business conditions,” but generally improving economic
conditions along with a strong appetite for electronics are spurring the
current growth prospects for the semiconductor industry.

In
terms of developing market outlooks, the industry is perpetually seeking patterns
and indicators in forecasting, though longer the time horizon the higher degree
of unknowns and uncertainties there are in any forecast — and especially so for
capital investments for leading edge semiconductor manufacturing. Examining a perspective
of the current year outlook for the semiconductor equipment market, one can use
the “simple bookings model.” This provides a correlation between first quarter
equipment order growth (comparing current year 1Q versus 1Q of the previous
year) with the overall equipment spending growth for the current year, and it
does provide a reasonable projection — at least in terms of direction and
magnitude — for annual equipment spending growth.

Global
bookings in the first quarter of this year were about 27 percent higher than the
first quarter of 2013 and point to a growth rate in the range of 15 to 20
percent for equipment spending in 2014 versus 2013 using the simple bookings model
correlation. Year-to-date equipment
billings are on the right track for growth, with 2014 billings through April
approaching 30 percent year-over-year growth. In summary, following two years of declining equipment
billings, 2014 looks to be a year for spending growth.

For comprehensive
insight into the market outlook, plan on attending SEMICON West the week of
July 7th. The annual SEMI/Gartner Market Symposium
is on Monday July 7th at 1PM. The featured keynote presenter at this
event is Sunit Rikhi, vice president of Technology and Manufacturing Group and general
manager of Intel Custom Foundry.

On Wednesday July 9th
is the SEMICON
West 2014 Bulls and Bears panel event. Discussions covering the
current industry cycle and emerging trends, equipment capex outlook, mobility
trends and the impact on the supply chain, and other topics.